The government has raised the minimum support price (MSP) or the price it pays local rice paddy farmers for their grain to Rs 850 per 100 kg from Rs 745 last year, Finance Minister P Chidambaram told reporters on Thursday. He said this was an ad-hoc price fixed by the federal government after various state governments had given conflicting recommendations on the price to be paid to farmers.
Readers Opinions - Govt raises MSP for rice paddy to Rs 850 a quintal
K.R.S.Reddy, Hyderabad, says:
MSP of paddy is raised only by Rs.105/- to Rs.850/- per quintal, from Rs.745/- last year, as against recommendation of CACP of Rs.1000/- per quintal. Govt says this is an adhoc increase as different state governments made different recommendations. It is reported that while states ruled by BJP recommended less than Rs.1000, states ruled by left parties did not send any recommendations at all. This is a specious plea and lame excuse and smacks of political dirty game. Referring the issue to another committee does not solve the problem. Different state governments have been making different recommendations in the past also. The CACP, taking all aspects into consideration, recommended Rs.1000 per quintal .Usually, CACP recommendations are accepted with out change. This time Government chose to increase by a paltry sum of Rs.105 per quintal. The Government should know better than this. Rice prices are ruling at $1000 per ton internationally and FAO predicts that the price will continue to be high. Cost of production of paddy per quintal is around Rs.900 excluding lease amount. The MSP fixed does not cover even cost of cultivation. The NCF has recommended C2cost plus 50%.Government ignored all these and fixed MSP less than cost and duped farmers again .I t is not a political game to be played against one another. This is a matter of food security to nation and life and death to farmers. Government should not play with food security and farmers lives. If the MSP is not revised covering costs plus 50% heavy price have to be paid by way of importing at Rs.4000 per quintal. Let the government be aware of this possible fall out of their short sighted decision and revise MSP to compensate cost plus 50% before they incur the wrath of farmers who cannot wait anymore and cannot tolerate this rank discrimination. [13 Jun, 2008 ]
Inflation-Farmers are the losers
Producers of steel cement and cars used the price rise to jack up their product tags. But our farmers have had no such luck. If they harvested cereals, they were forced to sell at minimum support prices to government agencies. Unlike last year, they did not get the advantage of leveraging support prices to negotiate higher prices from private traders, who were asked to stay away from markets. Government agencies also imported enough pulses to force farmers growing the domestic varieties to keep their prices down. And, as this depressed their income, they were forced to cut back on their consumption of other goods. As the NSSO 61st round of consumption data shows, this meant cutting back on education and medical expenses, which account for nearly 50% of rural India’s spend. This also explains the reluctance of states to allow farming to emerge as a regular economic activity. The ban on futures is not for nothing. The government has ensured that the one clear lesson a farmer should draw from this inflationary episode is that the only path to economic progress is to switch professions. It makes little economic logic, but India’s farmers will end this bout of inflation as the only losers. This is reminiscent of a period in Soviet history when the central government had deliberately kept prices in shops artificially low to feed its army of industrial workers building steel plants and the like. Is the Indian state’s collective response to the agricultural sector very different? While political capital can surely be made on farmers’ misery, the policy each party wants is firmly tilted towards consumers.
Comments: Inflation is heading towards 10% .Food prices rose only by 5%.Hence farmers lose 50% of their income. This has always been the lot of Indian farmers ever since Independence. Prices of agri commodities is artificially depressed by the government to help the consumers at the cost of farmers, with the result ,their incomes dwindled and there is wide disparity in rural and urban incomes. The sweet words of successive governments only left bitter taste in the mouths of farmers. They pontificate “FARMER FIRST” and In practice they ensure that “FARMER LOST” .When and how this will change? When farmers unite and fight for their rightful share unitedly. Vested interests do not divest themselves of their spoils easily.
Investment in rural infrastructure Increases Agri. Incomes more than two fold
The share of agriculture in the GDP has steadily declined from 36.4 per cent in 1982-83 to 18.5 per cent in 2006-07, although this sector still supports more than half a billion people, providing employment to 52 per cent of the workforce. The stagnating agriculture, languishing food output account for millions of poor farmers struggling with high debts and crop failures, hundreds of them compelled to give up their lives.
The key to the alleviation of rampant poverty among farmers is the increase in productivity of staple crops. Irrigated land productivity is more than double that of rain-fed land.
Agriculture can ease rural-urban disparities in India, China: World Bank-WDR 2008
Greater investment in agriculture in transforming economies such as China, India and Morocco, is vital to the welfare of 600 million rural poor people living there, says the latest World Development Report. For the poorest people, GDP growth originating in agriculture is about four times as effective in reducing poverty as GDP growth originating outside the sector. The livelihoods of subsistence farmers can be improved by increasing the productivity of staple crops in lagging regions, a move that would require major investments in soil and water management and in agricultural research.
Food Summit calls for more investment in agriculture-FAO
The Summit on soaring food prices, convened by the UN Food and Agriculture Organization (FAO), has concluded with the adoption by acclamation of a declaration that “ There is an urgent need to help developing countries and countries in transition expand agriculture and food production, and to increase investment in agriculture, agribusiness and rural development, from both public and private sources,"
On the most contentious issue - biofuels - the suggestion by an FAO working party that international standards be established to ensure biofuels were not produced at the expense of the world's hungry has been ignored. Instead there is some watered-down prose on "the challenges and opportunities posed by biofuels".
Comments: CIFA suggested during round table discussions, the policy of “FOOD FIRST AND FUEL NEXT”. It is imperative that this policy is adopted by those countries who burn food for producing fuel in the interests of world food safety.
Banks are duty-bound to lend to MSEs: FM
Making a strong case for freeing micro and small enterprises (MSEs) from the clutches of private money lenders, Finance Minister P Chidambaram on Saturday reminded the banks that they are duty-bound to lend to the sector. "It is the duty of banks to help and nurse these micro and small enterprises... MSEs are entirely dependent on unscrupulous money lenders who charge huge interest rates.
Comments: Credit to Micro enterprises is a megre 1.20% of bank credit a March 2007, which needs to be improved to 4% as per NCUES recommendations.
Horticulture Farmer gets only 1/5 th of what consumer pays
The biggest bottleneck for the organized retail industry to grow in India is an inefficient supply chain network.
Unlike elsewhere, the supply chain in India is dependent on middlemen. Moreover, a large part of crop produce goes waste due to outdated post-harvest infrastructure. Though India is the second largest producer of fruits and vegetables in the world, only 2% of the produce is processed The government estimates that, every year, agriculture produce worth Rs 56,000 crore is wasted due to inadequate processing and cold storage facilities.
As a result a consumer in India pays five times more for his food than what the farmer actually gets, while in USA, this ratio is just 2:1. It is estimated that that an investment of US$ 28 billion would be required in the agro-food processing industry in the next five years. In fact, organized retail backed by an efficient supply chain has the potential of raising the rate of growth of the food processing sector from 6% to 20% in the next five years.
Give top priority to Agriculture – World Food Summit calls for more investment in agriculture
The world food summit which concluded on 5th June at Rome sponsored by FAO declared that the current food crisis can be addressed from three perspectives:
1) sending emergency aid to the most poor& hunger nations. The FAO got pledges of $4 billion to support agriculture in developing countries;
2) Countries to pursue Agriculture, on priority basis. As their most productive activity, by investing more in agriculture infrastructure,
3) Strengthening rural communities to revitalize agriculture;
On the most contentious issue - biofuels - the suggestion by an FAO that international standards be established to ensure biofuels were not produced at the expense of the world's hungry has been ignored. The final declaration talks about the need to "minimize the use of restrictive measures that could increase the volatility of international prices" - a disapproving reference to export bans and tariffs.
Comments: World Bank and other funding agencies held round table discussions with CSOs on 5th May. Sri P.Chengal Reddy, Secretary General, CIFA, was invited to participate. The following suggestions were given during the RTD by CIFA, to get over current food crisis:
SHORT TERM: Stop using food for producing bio-fuels, Have a policy of FOOD FIRST, FUEL NEXT. Discourage over eating of food in developed countries ,thus saving excess consumption of food by 25% , which is useful to feed nutritionally starved people ,elsewhere in the world suffering from mal nutrition, In India, encourage eating of Nutri-rich wholesome grains like maize, jowar, bajri and ragi, by widely publishing their nutritional values and health benefits, Launch campaign on virtues of fasting and benefits of fasting and encourage MISS-a- MEAL-a-DAY (in a week) programme, remunerative prices, so that more land will be used for cultivation of food grains .
LONG TERM: * Focus on research and development high yielding and improved seed varieties focus on G M varieties,* Improving soil health,
* Revamping and reactivating extension services,* Greater public investment for irrigation ,rural power, road connectivity, market and storage facilities,* More investment credit by funding agencies and banks for infrastructure development*) Special focus on improving yields in dry land farming
WE ARE GLAD TO NOTE THAT SOME SUGGESTIONS MADE BY CIFA WERE DISCUSSED AT THE SUMMIT.
India's policy regime marred by 'bad ideas'
NEW DELHI: The Growth Report released recently by the Commission for Growth and Development list some actions as bad ideas not conducive to development. Power subsidy, subsidizing consumers of petroleum products by resisting revision of prices despite a sharp rise of crude, taxes on export of steel and iron ore, ban on export of rice variants, measures such as reducing fiscal deficits by cutting expenditure on infrastructure, banning exports for long periods to keep domestic prices low for consumers at the expense of producers and imposing price controls to stem inflation — are seen as bad ideas . The report suggests that inflation can be better handled though other macroeconomic policies. Poor regulation of the banking system combined with excessive direct control and interference also qualify as a bad idea. Rapid appreciation of the exchange rate when an economy is ready for the transition towards higher-productivity industry too does not find favour. Excessive regulation of banks prevents development of an efficient system of financial intermediation, which, in turn, results in higher costs in terms of productivity, the report notes.
India's food inflation lowest among 15 nations
India has been better off in managing food inflation compared to several other developing countries in 2007-08, Prices of food articles rose by 5.8 per cent in India, the lowest increase among 15 developing countries for the period ending February 2007-08. Food prices showed the highest increase at 25.6 per cent in Sri Lanka, followed by Kenya at 24.6 per cent and China 23.3 per cent, the report entitled 'Agriculture Outlook 2008' said. However, OECD and the UN's FAO food agency said food prices would remain high internationally over the next decade even if they fall from current records, meaning millions more risk further hardship or hunger.
Bulging U.S farm subsidies
For the next five-years, $307 billion farm bill lavishes cash on wealthy farm households in USA. This invited sharp criticism from by all .When the developing countries are grappling with the issues of globalization, USA is resorting to over protection thus blocking Doha Round Talks, Prime Minister of India said.
Dismal performance of banks in giving credits to self-help groups (SHGs) under the poverty alleviation programme, Swarnjayanti Gram Swarozgar Yojna (SGSY)
SGSY is a credit-cum-subsidy scheme where credit is a critical component and subsidy is only an enabling element. But the financial performance of the scheme (since its inception in April 1999 to February 2008) shows that only Rs 13,538 crore of credit was mobilized from banks while the cumulative target for all these years was Rs 25,901 crore. This takes the average credit mobilized from the banks per year to a poor 54 per cent
Banks are duty-bound to lend to MSEs: FM
Making a strong case for freeing micro and small enterprises (MSEs) from the clutches of private money lenders, Finance Minister P Chidambaram on Saturday reminded the banks that they are duty-bound to lend to the sector. "It is the duty of banks to help and nurse these micro and small enterprises... MSEs are entirely dependent on unscrupulous money lenders who charge huge interest rates.
Comments: Credit to Micro enterprises is a megre 1.20% of bank credit a March 2007, which needs to be improved to 4% as per NCUES recommendations.
‘Include millets in the public distribution system’
Millet Network of India (MINI) has demanded that the Union Government include millets in the public distribution system, while announcing an ecological bonus to farmers growing millets. This will help the country address the food security and agrarian crisis. Two major advantages of growing millets were saving valuable water and ensuring the nutritional needs of the people. They can be grown in extreme and harsh weather conditions. Millet acreage had fallen over a period of time due to undue focus on rice and wheat. From 45.9 million hectares in 1990, the acreage decreased to 31.5 million hectares, a drop of 35 per cent. Since millet farming didn’t consume much water and has zero dependence on chemical fertilizers, MINI felt that farmers could be given a bonus of Rs 5,000 an acre.
Comments: CIFA too suggested ,in Round Table Discussions convened by the World Bank on 5th May,to encourage eating of Nutri-rich wholesome grains like maize, jowar, bajri and ragi, by widely publishing their nutritional values and health benefits.
Expect normal monsoon
The monsoon has been trailing the normal path and most parts of the country receiving rainfall as per the schedule. The Indian Meteorological Department has already predicted a near-normal monsoon this year, which has given high hopes to farmers who are largely dependent on the rain. As per the present signals that we have received, it is absolutely normal and is likely to cover the entire country as per its normal path," said a Met official.
State Bank move on farm loans draws flak CIFA writes to PM to direct SBI to reverse the decision
In a letter to Prime Minister Manmohan Singh, Consortium of Indian Farmers Associations (CIFA) Secretary General P. Chengal Reddy pointed out that the “knee-jerk” reaction of SBI was “unwarranted, uncalled for and sets a dangerous precedence”.On behalf of the CIFA, Mr. Reddy argued that since there was inordinate delay in announcing the details of the loan waiver scheme which is based on the criteria of acreage instead of net income or loan amount, any sensible borrower would wait for the detailed programme of implementation of the scheme.
“For this natural response, which is temporary, SBI’s unthinking reaction is anti-farmer, anti-growth and is a slap on the cheek of the Prime Minister, the Finance Minister and the Agriculture Minister who conceived this bold scheme, as repayment of debt to farmers,” he said.Mechanisation, he said, was one of the means to improve productivity and this sudden stoppage of loans for mechanisation went against the efforts to improve productivity, especially in these days of global food crisis.
“Hope that better sense prevails with the bigwigs of SBI and they will reverse their decision of stopping loans for mechanisation, which is counterproductive,” he said and requested the Prime Minister to instruct the bank to withdraw the orders “before other banks follow the cue of the biggest bank and they too stop loans”.
SBI withdraws decision on tractor loans freeze
MUMBAI: Country's largest lender State Bank of India (SBI) on Wednesday decided to withdraw the circular issued on Monday that asked its branches to freeze loans for purchase of tractors and farm implements because of rising default rate. "The circular is withdrawn with immediate effect,'
' SBI Chairman O P Bhatt said in a statement.
The decision follows protests from political parties and farmers' bodies against the lender's earlier decision to freeze loans for purchase of tractors and farm implements. - PTI
90% Farmers get less than A Peon’s Salary as Income
A study conducted by ANGRAU ,Hyderabad brought out startling revelations about non-profitability of agriculture .In order to get Rs4000 per month equivalent to salary of a peon, a farmer needs 15 to 20 acres of dry land in Telengana and Rayalaseema areas and 5 acres wet and 2 1/2 acres dry land in coastal area. If it is totally wet land,10 acres of land where paddy can be cultivated is needed.
Comments: This is pathetic position of 90% farmers in AP, less than a peon for all the difficulties and uncertainties he goes through to feed business and regular income class .Now the question is whose contribution is more and what income he gets for value addition of his contribution. Clearly, farmers are exploited through out ages to benefit business and regular income consumers especially in urban area.
Huge Subsidy for TATA’s car project at Singur at the cost of poor. A mere Rs130 crore compensation for poor peasants
The land at Singur has been provided by the government to the TATA’s on a 90-year lease, with no down payment. For the first five years TATA’ s will pay Rs. 1 crore a year as rent and the yearly payment will increase by 25% for each 5-year interval for the next 25 years. For the next 30 years payments will increase by 33% at a five-year interval and for the final 20 years the rent would be Rs. 20 crore per year. The West Bengal government will also provide the TATA’s a Rs 200 crore loan at 1% rate of interest while the VAT proceeds accruing from the sales of cars will be handed back to the TATA’s again as a 1% loan for the first 10 years.
What is the amount of compensation that landowners will get from a Left Front government? Rs 130 crore.
Comments: The left government, which cries hoarse about poor being deprived, become agents of TATAs to deprive poor peasants their precious possession,viz; land by paying a pittance and thinks nothing of giving poor Tatas a loan of Rs200 crores at as high an interest rate of 1% per annum and gives back VAT tax amount too. That is why it is said ‘Communists turned capitalists are worse than hardened capitalists who, in comparison, look like saints.’
Food prices not responsible for high rate of inflation
There is a hue and cry about raising food prices. In fact the primary products" category, which include cereals, pulses etc;, recorded a year-on-year inflation rate of 5.14 per cent. Contrast this with the iron steel category, which saw an inflation of rate of 35.2 per cent. So food prices are not the culprit, it is steel prices responsible for higher rate of inflation.
US farm subsidy doubles in a decade
The US’ trade distorting farm subsidy more than doubled a decade after it committed to bring them down by 20% in the Uruguay Round agreement of the World Trade Organization in 1995. The overall trade distorting subsidies (OTDS), which were about $10 billion in 1995, increased to $22.6 billion in 2005 and then fell slightly to $17.4 billion the following year.
Decline of World Bank lending to Agri projects
In 1980, 30 per cent of annual World Bank lending went to agricultural projects. This declined to 12 per cent in 2007. The overall proportion of all Official Development Assistance going to agriculture is currently only 4 per cent.
Govt unlikely to revise SMP of sugarcane for 2008-09 season
The government is understood to have rejected the proposal to increase the minimum price of sugarcane to Rs 155 per quintal, which was recommended by the Commission for Agricultural Costs and Prices. "We have already fixed the Statutory Minimum Price (SMP) for 2008-09 sugar season," a senior government official said ruling out any further revision in the SMP
Comments: The Government neither accepts the recommendations of Prof. Swaminathan Commission, to fix MSP at C2 cost plus 50%, nor concedes to the recommendations of CACP which are based on computation of cultivation costs currently prevailing. Both these bodies are appointed by the government “ in the interest of farmers”. Yet their recommendations are ignored. The Government of India is thus under pricing agri commodities deliberately to serve the interests of the Sugar Mills.Cultivators are at a loss..What happened to the promise of the P.M that the government will never sacrifice the interests of farmers to benefit others?
How can we produce more food?
A slew of policy measures is needed if India has to step up its agricultural production. Water is the most important necessity for farmers. Consider this: in India, 56% of food grains is produced from 47 million hectares of irrigated land while the remaining 44% is produced from 95 million hectares of rain dependent land. Crop yields will shoot up with investment in irrigation, supplemented with soil testing and scientific application of fertilizers. The other important aspect that needs to be handled urgently is land reforms
Global demand for rice to rise 50% in two decades
The demand for rice is expected to grow by 50 per cent in the next two decades, according to a report by the world's largest basmati rice exporter. "Nearly half of the world's 6.6 billion population depends on rice to survive. Its demand is expected to grow by 50 per cent by 2030," UK-based Tilda Riceland said in the report released here today.
Per capita availability of cereals is decreasing
While population is growing at 1.9% per annum, foodgrain production is stagnating. Hence consumption of cereals has declined from a peak of 468 gms per capita per day in 1990-91 to 412 gms per capita per day in 2005-06, indicating a decline of 13%,”To ensure adequate procurement and buffer stocks the study calls for purchase of foodgrains by government at market prices rather than minimum support price (MSP)
FICCI 'roadmap for agri reforms' proposes private mandis
The current mandi system, where farmers sell their produce, should be allowed to exist while permitting private markets within or outside the regulated markets (mandis), industry chamber FICCI has said in a report. FICCI, which has prepared a road map for agri marketing reforms, said: "Agricultural Produce Marketing Committee (APMC) regulated markets have to co-exist with other marketing channels that are presently shaping up."
Rice output to hit new record: FAO
“World paddy production in 2008 could grow by about 2.3%, reaching a new record level of 666 million tones, according to our preliminary forecasts,” “For the first time, paddy production in Asia may surpass the 600 million tone benchmark this year, amounting to 605 million tones,” FAO rice expert Conception Calpe said in a statement. World rice consumption is expected to rise 2% to 437 million tones in milled terms in 2008,
72% of India's fruit, vegetable produce goes waste Pawar called for an appropriate policy support for the growth of retail chains for fruits and vegetables in the country
The production of vegetables in India is next only to China. The vegetable and fruit production contributes more than 30 per cent of the agriculture GDP. The crop diversification has led to rise in horticulture production, which has reached 185.2 billion tonnes last year,” the country produces 12 MT fruits and 109 MT vegetables But the real challenge starts after the production. More than 72 per cent of the vegetable and fruits are wasted in the absence of proper retailing.( Fruit and Vegetable Summit organised by Confederation of Indian Industry (CII)
Comments:CIFA Secretary General Sri P.Chengal Reddy participated in the Fruit and Vegetable summit and presented views of CIFA and the need to organize commodity groups of farmers growing fruits and vegetables.FFA AP has already started organizing commodity groups of farmers growing vegetables in and around Hyderabad,AP.
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